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Latest news and updates on issues affecting business. July 2017
In this issue
Grenfell Tower highlights need for fire risk assessments
• Grenfell Tower highlights need for fire risk assessments
On 14th June, the London Fire Brigade was called to put out a fire that had started in one of Grenfell Tower’s 127 flats. The fire then spread to the cladding panels on the building’s exterior. Despite the firefighters’ best efforts, 79 residents died in the fire. The tragic loss of life has far-reaching impacts and highlights the need to undertake formal fire risk assessments of your premises.
• Recent HSE news and prosecutions • Are gig economy workers right for your business? • Expecting the unexpected: safeguarding your business • Avoiding a 'systemic failure' H&S fine
Why do I need a fire risk assessment? Fire risk assessments are a legal requirement for anyone that owns property or is otherwise in control of commercial premises and other non-domestic premises, such as the common areas of multi-occupied residential buildings. Conducting risk assessments helps you prevent fires, keeps your property and employees safe, and increases the chances that your business can recover should a costly fire happen. Even though the number of fire claims has decreased from 71k in 2006 to 26k in 2016, the average cost of a fire claim has increased from £5,5k to nearly £15k over the same period of time, according to the Association of British Insurers. All UK employers with five or more employees are required to keep a written record of their fire risk assessments. Whilst not required for smaller businesses, it is still considered best practice. The government recommends that you review your fire risk assessment annually, as well as after any significant changes to your building. Who completes the fire risk assessment? As an employer or someone responsible for a business or other non-domestic premises, you are responsible for undertaking and reviewing the fire risk assessment. You can do the fire risk assessment yourself with the help of industry-specific guides from the Home Office found here. If you do not have the expertise or time to do it yourself, you need to appoint a competent fire risk assessor to undertake the assessment on your behalf. For help choosing a fire risk assessor, follow the London Fire Brigade’s eight tips found here. Failing to undertake a fire risk assessment or commissioning an assessor to do it for you could result in fines or imprisonment. How do I undertake a fire risk assessment? Follow these five basic steps to undertake a fire risk assessment at your premises: 1. Identify fire hazards. Determine how a fire could start, including fuel sources (such as rubbish, paper and paint) and ignition sources (such as heaters, lighting and naked flames).
2. Identify who is at risk. Analyse whether any particular group (such as employees who are older or disabled) is more at risk than others. 3. Evaluate and then remove or reduce the risks. Appraise the potential risk for each section of the property, noting possible fire hazards. For each hazard, devise a process to minimise or completely remove the risk. 4. Record your findings, prepare an emergency plan and provide training. Keep clear, detailed records of any identified fire hazards and what you did to address them. Also, develop an emergency plan in case there is a fire. Train employees on the emergency plan and how they should react if there is a fire. 5. Review and update the fire risk assessment annually. Review your fire risk assessment and emergency plan annually. In addition, you should make revisions if there is a fire.
Recent HSE news and prosecutions Company and contractor sentenced for uncontrolled collapse of building After the uncontrolled collapse of a building onto the High Street, Panther AL (VAT) Ltd was fined £160k and ordered to pay costs of £9,128.89, and a hired contractor was sentenced to nine months imprisonment. The contractor failed to perform a risk assessment and did not apply for a road closure before demolition work began, which placed members of the public at risk. Sentence following multiple deaths on excavation site After four workers were fatally crushed, Claxton Engineering Services Ltd was fined £500k and ordered to pay costs of £100k, and Encompass Project Management Ltd was fined £200k and ordered to pay costs of £50k. Workers were constructing a large steel structure when it collapsed on top of the group. In its investigation, the HSE found the company had serious flaws in its planning, management and monitoring of the project. Construction company fined after member of public drowned Glasgow-based construction company, Sandford Park Ltd, was fined £110k after an 83-year-old man walked onto a construction site and died. The site had been closed for the holidays and, as the man walked through, he fell into a flooded excavation site and drowned. In its investigation, the HSE found that the company failed to install the appropriate level of fencing around the site to prevent this type of incident from occurring.
Are gig economy workers right for your business? The gig or sharing economy is composed of organisations that hire independent workers for short-term positions. In the United Kingdom, approximately 5m people are employed in this fashion, according to the University of Hertfordshire. In fact, more than a quarter of UK SMEs have employed a gig economy worker within the last year. Your organisation may even employ some members of this group if you have volunteers, seasonal employees, contractors and other kinds of non-traditional staff members. Whilst they may be non-traditional, gig economy workers can be just as beneficial to your organisation as full-time employees. In fact, 57% of SMEs believe that gig economy workers provide greater flexibility for their business and 38% believe that they allow for better workforce management. Some SMEs even reported that gig workers were more efficient in completing assignments due to the potentially stricter deadlines they had to meet. However, hiring gig economy workers also has its disadvantages. With a temporary workforce, it is difficult to build a rapport with a gig employee and provide adequate (and sometimes necessary) training and supervision. Indeed, 40% of SMEs reported that they were worried that the gig economy created a less motivated workforce. Just as you do for your full-time employees, you have a legal obligation to provide these individuals with a safe working environment and employment rights. Even though some gig economy members may be independent workers, your organisation should not label them as self-employed. If you do, that could violate their employment rights. Classifying your employees correctly is essential as it impacts your compulsory employers liability (EL) insurance. To ensure all UK employees are protected, the government requires most businesses, with a few exceptions, to have at least a £5m EL policy. The HSE enforces this rule and can fine your organisation up to £2.5k every day if you do not have the appropriate level of insurance.
Expecting the unexpected: safeguarding your business Terrorism is the second largest threat perceived by UK organisations, according to recent research. Even though you cannot predict the unexpected, you can plan for it. One of the best precautionary measures that you can adopt is developing a business continuity plan. A business continuity plan provides you with thorough guidance on how to recover the most vulnerable parts of your organisation after a business interruption occurs, such as a terrorist attack, fire or natural disaster. Yet only 27% of SMEs have a business continuity plan in place, compared to 68% of medium-sized businesses and 75% of large organisations, according to research. If implemented and maintained, a business continuity plan can be the difference between successfully recovering from a business interruption and going out of business. In fact, every year about 20% of UK businesses face a potentially devastating challenge. Unfortunately, 1 out of 4 organisations impacted by a disaster never reopen their doors. To ensure that your organisation can stay open after a business interruption, follow these six steps to develop your own plan: 1. 2. 3. 4.
Examine your organisation to determine your minimum and desired level of service. Assess the potential risks to your organisation. Develop a strategy to deal with the immediate aftermath of a disaster or other incidents. Prepare a business continuity plan to summarise how your organisation will deal with a disaster and recover to its desired level of service. 5. Rehearse your business continuity plan to identify any gaps. 6. Annually review your business continuity plan to ensure it is up to date.
Avoiding a ‘systemic failure’ H&S fine Since 1st February 2016, there have been more than 600 organisations sentenced under the new Sentencing Council guidelines for health and safety offences. During that same period, the average cost of a health and safety fine has risen from £69.5k to £211k. However, depending on the level of culpability, organisations may be fined as much as £20m. In order to receive such a sizeable fine, an organisation must be found to be highly culpable, which requires evidence of a ‘systemic failure’ to address risks to health and safety. Systemic failure occurs when an organisation suffers a health and safety breach attributable to a widespread failure in the systems put in place to manage risks - not merely a failure to manage risks from a single breach. This means that the court will scrutinise not just what led to the breach in question, but the overall efficacy of your risk management and health and safety processes. Moreover, if an organisation is found to have deliberately breached or has displayed a flagrant disregard for the law, the severity of the fine may be increased. To help your organisation avoid systemic failure, you should conduct a thorough annual risk management and health and safety review of your premises and policies. Remember to keep track of your efforts. In addition, supplement your efforts by providing comprehensive safe work practices training for all your employees.
The content of this newsletter is of general interest and is not intended to apply to specific circumstances. It does not purport to be a comprehensive analysis of all matters relevant to its subject matter. The content should not, therefore, be regarded as constituting legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. Further, the law may have changed since first publication and the reader is cautioned accordingly. © 2017 Zywave, Inc. All rights reserved.
bluefingroup.co.uk Bluefin Insurance Services Limited. Registered Office: 1 Tower Place West, Tower Place, London, EC3R 5BU. Registered in England No: 931954. Authorised and regulated by the Financial Conduct Authority. 2140-0717
In this issue
Grenfell Tower highlights need for fire risk assessments
• Grenfell Tower highlights need for fire risk assessments
On 14th June, the London Fire Brigade was called to put out a fire that had started in one of Grenfell Tower’s 127 flats. The fire then spread to the cladding panels on the building’s exterior. Despite the firefighters’ best efforts, 79 residents died in the fire. The tragic loss of life has far-reaching impacts and highlights the need to undertake formal fire risk assessments of your premises.
• Recent HSE news and prosecutions • Are gig economy workers right for your business? • Expecting the unexpected: safeguarding your business • Avoiding a 'systemic failure' H&S fine
Why do I need a fire risk assessment? Fire risk assessments are a legal requirement for anyone that owns property or is otherwise in control of commercial premises and other non-domestic premises, such as the common areas of multi-occupied residential buildings. Conducting risk assessments helps you prevent fires, keeps your property and employees safe, and increases the chances that your business can recover should a costly fire happen. Even though the number of fire claims has decreased from 71k in 2006 to 26k in 2016, the average cost of a fire claim has increased from £5,5k to nearly £15k over the same period of time, according to the Association of British Insurers. All UK employers with five or more employees are required to keep a written record of their fire risk assessments. Whilst not required for smaller businesses, it is still considered best practice. The government recommends that you review your fire risk assessment annually, as well as after any significant changes to your building. Who completes the fire risk assessment? As an employer or someone responsible for a business or other non-domestic premises, you are responsible for undertaking and reviewing the fire risk assessment. You can do the fire risk assessment yourself with the help of industry-specific guides from the Home Office found here. If you do not have the expertise or time to do it yourself, you need to appoint a competent fire risk assessor to undertake the assessment on your behalf. For help choosing a fire risk assessor, follow the London Fire Brigade’s eight tips found here. Failing to undertake a fire risk assessment or commissioning an assessor to do it for you could result in fines or imprisonment. How do I undertake a fire risk assessment? Follow these five basic steps to undertake a fire risk assessment at your premises: 1. Identify fire hazards. Determine how a fire could start, including fuel sources (such as rubbish, paper and paint) and ignition sources (such as heaters, lighting and naked flames).
2. Identify who is at risk. Analyse whether any particular group (such as employees who are older or disabled) is more at risk than others. 3. Evaluate and then remove or reduce the risks. Appraise the potential risk for each section of the property, noting possible fire hazards. For each hazard, devise a process to minimise or completely remove the risk. 4. Record your findings, prepare an emergency plan and provide training. Keep clear, detailed records of any identified fire hazards and what you did to address them. Also, develop an emergency plan in case there is a fire. Train employees on the emergency plan and how they should react if there is a fire. 5. Review and update the fire risk assessment annually. Review your fire risk assessment and emergency plan annually. In addition, you should make revisions if there is a fire.
Recent HSE news and prosecutions Company and contractor sentenced for uncontrolled collapse of building After the uncontrolled collapse of a building onto the High Street, Panther AL (VAT) Ltd was fined £160k and ordered to pay costs of £9,128.89, and a hired contractor was sentenced to nine months imprisonment. The contractor failed to perform a risk assessment and did not apply for a road closure before demolition work began, which placed members of the public at risk. Sentence following multiple deaths on excavation site After four workers were fatally crushed, Claxton Engineering Services Ltd was fined £500k and ordered to pay costs of £100k, and Encompass Project Management Ltd was fined £200k and ordered to pay costs of £50k. Workers were constructing a large steel structure when it collapsed on top of the group. In its investigation, the HSE found the company had serious flaws in its planning, management and monitoring of the project. Construction company fined after member of public drowned Glasgow-based construction company, Sandford Park Ltd, was fined £110k after an 83-year-old man walked onto a construction site and died. The site had been closed for the holidays and, as the man walked through, he fell into a flooded excavation site and drowned. In its investigation, the HSE found that the company failed to install the appropriate level of fencing around the site to prevent this type of incident from occurring.
Are gig economy workers right for your business? The gig or sharing economy is composed of organisations that hire independent workers for short-term positions. In the United Kingdom, approximately 5m people are employed in this fashion, according to the University of Hertfordshire. In fact, more than a quarter of UK SMEs have employed a gig economy worker within the last year. Your organisation may even employ some members of this group if you have volunteers, seasonal employees, contractors and other kinds of non-traditional staff members. Whilst they may be non-traditional, gig economy workers can be just as beneficial to your organisation as full-time employees. In fact, 57% of SMEs believe that gig economy workers provide greater flexibility for their business and 38% believe that they allow for better workforce management. Some SMEs even reported that gig workers were more efficient in completing assignments due to the potentially stricter deadlines they had to meet. However, hiring gig economy workers also has its disadvantages. With a temporary workforce, it is difficult to build a rapport with a gig employee and provide adequate (and sometimes necessary) training and supervision. Indeed, 40% of SMEs reported that they were worried that the gig economy created a less motivated workforce. Just as you do for your full-time employees, you have a legal obligation to provide these individuals with a safe working environment and employment rights. Even though some gig economy members may be independent workers, your organisation should not label them as self-employed. If you do, that could violate their employment rights. Classifying your employees correctly is essential as it impacts your compulsory employers liability (EL) insurance. To ensure all UK employees are protected, the government requires most businesses, with a few exceptions, to have at least a £5m EL policy. The HSE enforces this rule and can fine your organisation up to £2.5k every day if you do not have the appropriate level of insurance.
Expecting the unexpected: safeguarding your business Terrorism is the second largest threat perceived by UK organisations, according to recent research. Even though you cannot predict the unexpected, you can plan for it. One of the best precautionary measures that you can adopt is developing a business continuity plan. A business continuity plan provides you with thorough guidance on how to recover the most vulnerable parts of your organisation after a business interruption occurs, such as a terrorist attack, fire or natural disaster. Yet only 27% of SMEs have a business continuity plan in place, compared to 68% of medium-sized businesses and 75% of large organisations, according to research. If implemented and maintained, a business continuity plan can be the difference between successfully recovering from a business interruption and going out of business. In fact, every year about 20% of UK businesses face a potentially devastating challenge. Unfortunately, 1 out of 4 organisations impacted by a disaster never reopen their doors. To ensure that your organisation can stay open after a business interruption, follow these six steps to develop your own plan: 1. 2. 3. 4.
Examine your organisation to determine your minimum and desired level of service. Assess the potential risks to your organisation. Develop a strategy to deal with the immediate aftermath of a disaster or other incidents. Prepare a business continuity plan to summarise how your organisation will deal with a disaster and recover to its desired level of service. 5. Rehearse your business continuity plan to identify any gaps. 6. Annually review your business continuity plan to ensure it is up to date.
Avoiding a ‘systemic failure’ H&S fine Since 1st February 2016, there have been more than 600 organisations sentenced under the new Sentencing Council guidelines for health and safety offences. During that same period, the average cost of a health and safety fine has risen from £69.5k to £211k. However, depending on the level of culpability, organisations may be fined as much as £20m. In order to receive such a sizeable fine, an organisation must be found to be highly culpable, which requires evidence of a ‘systemic failure’ to address risks to health and safety. Systemic failure occurs when an organisation suffers a health and safety breach attributable to a widespread failure in the systems put in place to manage risks - not merely a failure to manage risks from a single breach. This means that the court will scrutinise not just what led to the breach in question, but the overall efficacy of your risk management and health and safety processes. Moreover, if an organisation is found to have deliberately breached or has displayed a flagrant disregard for the law, the severity of the fine may be increased. To help your organisation avoid systemic failure, you should conduct a thorough annual risk management and health and safety review of your premises and policies. Remember to keep track of your efforts. In addition, supplement your efforts by providing comprehensive safe work practices training for all your employees.
The content of this newsletter is of general interest and is not intended to apply to specific circumstances. It does not purport to be a comprehensive analysis of all matters relevant to its subject matter. The content should not, therefore, be regarded as constituting legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. Further, the law may have changed since first publication and the reader is cautioned accordingly. © 2017 Zywave, Inc. All rights reserved.
bluefingroup.co.uk Bluefin Insurance Services Limited. Registered Office: 1 Tower Place West, Tower Place, London, EC3R 5BU. Registered in England No: 931954. Authorised and regulated by the Financial Conduct Authority. 2140-0717
